IFAC has issued the revised results of the Third Annual Global Leadership Survey. Key findings cover a wide-range of topics, including the need to support small and midsize businesses in the current environment, the increasing importance of adoption and implementation of international standards, and the improvements made in the area of corporate governance.
Thank you for inviting me here today. I would like to compliment UNCTAD on its initiative in organizing this seminar today. I would also like to personally recognize Yoseph Asmelash for his long-time, broad, and continued support of IFAC. Thank you, Yoseph.
IFAC plays a number of roles in the global financial system, although it is principally recognized for setting high-quality standards in international public sector accounting, auditing, education, and ethics through its independent boards. Our less recognized role--and one that will be even more important in the years ahead--is as the facilitator and driver of adoption and high-quality implementation. This is where IFAC can help change the game--moving from the goal of convergence to implementation of standards.
Before we can move to implementation, the world must agree on a single set of standards and stop using scarce resources debating whether there SHOULD be a single set of standards. In the case of accounting standards for the private sector, and, indeed, even for auditing standards, this debate has not yet been settled.
But in the case of public sector accounting, there is not much debate about which standards should be used. The International Public Sector Accounting Standards (IPSASs) were developed by the International Public Sector Accounting Standards Board (IPSASB), under the leadership of Chairman Mike Hathorn, who will be speaking to you in a moment. The IPSASs are a complete set of high-quality standards that governments at all levels can--and should--be using to report to taxpayers, their elected legislature, and borrowers around the world.
Good morning. As president of the International Federation of Accountants, IFAC, I want to thank you for joining us here this morning as we speak of issues that are critical not only to Brazil and Latin America but to the world. In addition, I want to extend greetings to our CReCER partner organizations - the World Bank, Inter-America Development Bank, IFAC member CFC and the six largest accounting networks - for all their work in the preparation of this week's program.
As I was preparing to travel to Brazil, the IFAC staff has helped by providing me background information about the economy and other issues that quite relate to the country I am visiting. One of the things that step out in my mind about the background information I have received was the motto of São Paulo, "Non ducor, duco"; which as I understand correctly, means, "I am not led; I lead." This speaks directly to the independence and the spirit and leadership in São Paulo and its people, and it forms the perfect background for me today, in choosing the themes that I would like to share with you.
There are four areas/four themes, of leadership that I would like to discuss. The first is: Speaking out as the global voice of the profession. The next is: Showing the way to an improved financial infrastructure. The third concerns: Supporting SMEs and micro-entities that need extra care; and, last, is: Sharing tasks when collaboration is appropriate.
Introduction Good morning. I would like to thank you for inviting me to speak on this wonderful occasion, and to say how very pleased I am to be here today.
As you may know, the ICAI was one of the founding member bodies of the International Federation of Accountants, IFAC, and has always been one of our key members. So it is even more gratifying to offer my personal congratulations on ICAI's Diamond Jubilee.
I also bring greetings and congratulations from IFAC's President, Bob Bunting, and Chief Executive, Ian Ball, who cannot be here today.
I'm here to look ahead this morning, and speak to you about the changing dimensions of the accountant's role. In other words, I will speak about what is expected of our profession today and tomorrow, and how we can better live up to those expectations.
In the course of my remarks, I will tell you about a few things that the International Federation of Accountants (IFAC) and the standard-setting Boards that operate its auspices are doing to help professional accountants keep the public interest in mind as they function as accountants and auditors.
Good morning. I'm delighted to be here this morning, as Accounting Technicians Ireland unveils its new identity program-to show IFAC's support for the work you are doing and to recognize the increasingly important role of accounting technicians in business and the public sector.
I would like to congratulate ATI collectively, but especially Mr. Aidan Collins, your new president, and Ms. Gay Sheehan, your chief executive, as you take this major step forward in increasing the organization's visibility.
As you know, IFAC, the International Federation of Accountants, is the global organization for the accountancy profession. Our mission is to serve the public interest by strengthening the profession and contributing to the development of strong and stable economies worldwide.
Consistent with that mission, we recognize the important role that accounting technicians play in providing a wide range of taxation and accountancy services to organizations of all sizes and types, and in contributing to business growth and development. We are proud to call Accounting Technicians Ireland one of our own, your organization having joined IFAC in 1991 and having been a strong supporter of our work since that time.
During its meeting in Dublin, Ireland, last week, the Board of the International Federation of Accountants (IFAC) agreed to hold a G-20 Accountancy Summit on July 23-24 in London to obtain the perspectives of accountancy institutes on how the profession can best contribute to strengthening the global financial system.
"Our goal is to identify and summarize the collective viewpoints of IFAC and accountancy institutes in G-20 countries and to submit these to the G-20 Working Groups prior to their September meeting," says IFAC President Robert Bunting. "This will be a follow up to IFAC's letter to three G-20 Working Groups in March, in which we indicated our support of their recommendations to implement international standards, improve the international regulatory framework, and strengthen the roles of the International Monetary Fund and the World Bank."
During the meeting, Board members considered the implications of the financial crisis and heard reports from the chairs of IFAC's independent standard-setting boards on their initiatives to update and develop new international auditing, education, ethics, and public sector accounting standards, particularly in those areas that would help the profession to address issues related to the financial crisis, and to adopt and promote their adoption and use by a wide group of stakeholders. Such adoption and implementation is vital to improving the transparency of the financial system and is consistent with G-20 recommendations.
In addition, the Board discussed how IFAC can best support small and medium practices, including assisting them in addressing issues emerging from the financial crisis and increasing awareness of the role of professional accountants in business in risk management, corporate governance, and transparent financial reporting.
"In addressing the current financial crisis, IFAC has remained focused on its commitment to serving the public by strengthening the profession and working together with other constituencies-business leaders, governments, international organizations, and regulators-to strengthen financial reporting and auditing," emphasizes Mr. Bunting.
About IFAC IFAC (www.ifac.org) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. Through its independent standard-setting boards, IFAC sets international ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high-quality performance by professional accountants in business.
Speaking yesterday to staff at the World Bank in Washington, D.C., Robert L. Bunting, President of the International Federation of Accountants (IFAC), said that the global accounting profession, with the support of the World Bank, must move ahead decisively with implementing a single set of high-quality international financial reporting and auditing standards. "Implementation is vital to strengthening global financial systems, especially during this time of economic crisis," stated Mr. Bunting.
He said that IFAC is committed to working closely with the World Bank and other institutions to deliver assistance efficiently where it can have the greatest impact. He cited two critical areas where the two organizations must build on current synergy:
To establish the appropriate professional accounting infrastructures and legal and regulatory mechanisms in developing and other countries; these are necessary pre-requisites for the effective implementation of standards; and
To urge reforms of public sector financial management systems, encouraging increased government accountability and the adoption of accrual accounting where resources permit.
Mr. Bunting emphasized IFAC support for the extension of work in these areas by the World Bank and the International Monetary Fund.
He also noted that IFAC has called on the G20 to support the World Bank's Reports on the Observance of Standards and Codes (ROSC) initiative as a tool to assess a country's financial reporting architecture and measure the future effectiveness of economic reforms resulting from the economic crisis.
In his remarks, Mr. Bunting also pointed out that small- and medium-sized entities (SMEs) and micro-entities require special attention. Some of these entities will be the next Microsofts, Googles, and IKEAs, contributing new jobs, innovation, and wealth to national and international economies if they are allowed to innovate and grow. "SMEs face challenges that are exacerbated in times of economic crisis-the ability to obtain capital and the rising costs of fuel, supplies, and other factors of production," Mr. Bunting explained. "We must take care not to further exacerbate these challenges through unnecessary and inappropriate re-regulation of the private sector and we must consider the cost-burden of their meeting regulatory and compliance requirements."
While IFAC-with 158 members in 123 countries and jurisdictions-is known for its work in establishing international standards for auditing, education, ethics, and public sector accounting, Mr. Bunting pointed out that one of its less-recognized roles will increase in importance in the coming years: as a facilitator and driver of the adoption and implementation of high-quality international standards.
"IFAC is committed to providing leadership on implementation issues by encouraging and facilitating collaboration among firms, practitioners, member bodies, regulators, and other stakeholders," stated Bunting, adding, "To do so effectively, the world must agree on a single set of standards."
To view Mr. Bunting's full speech, go to the IFAC Media Center at http://www.ifac.org/MediaCenter/?q=node/view/638. About IFAC IFAC (www.ifac.org) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 158 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. Through its independent standard-setting boards, IFAC sets international ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high-quality performance by professional accountants in business.
1) The Financial Crisis and the Opportunities for Change
A. Rahm Emanuel, President Obama's White House Chief of Staff, has stated, "Never let a serious crisis go to waste....it's an opportunity to do things you couldn't do before." It is certainly too great a crisis for IFAC to sit out. There are opportunities that we and other public interest enterprises cannot afford to miss. In IFAC's case:
Recognition of the importance of accounting and auditing is at a high point.
The interconnectedness of the world's financial markets and economies has been demonstrated in a resounding way.
The concern for a "level playing field" in the financial markets has created momentum for convergence of financial standards.
B. The Financial Crisis is a game changer for IFAC, as well as for other international institutions like the World Bank. We must act now and do so decisively to counteract the crisis as much as possible. For IFAC, we are faced with two tranches of economic reform:
In one tranche are those working to stabilize banks and improve the flow of credit; this is an area in which IFAC's role is that of a minor player;
In the other tranche are those working on the re-regulation of financial markets; here, IFAC has a major role to play.
The International Federation of Accountants (IFAC) endorses the proposals to enhance global financial regulation and improve the transparency of the international financial system that were issued in the G20 Communiqué on the world economic crisis on April 2 in London.
The G20 objectives are consistent with many of the recommendations that IFAC sent to the G20 Working Groups prior to the London summit, such as the call for implementing the Financial Stability Board's 12 key International Standards and Codes (which include International Standards on Auditing); making significant progress toward a single set of high-quality global accounting standards; making improvements in the international regulatory framework; and strengthening the roles of the International Monetary Fund and the World Bank. (See IFAC's submission at www.ifac.org/financial-crisis).
"We support the G20 in building a reformed international financial system," states Ian Ball, Chief Executive Officer of IFAC. "The accountancy profession will have a vital role to play moving forward, and IFAC will continue to emphasize the measures we suggested in our recommendations to the G20 last week."
Among IFAC's recommendations were the adoption of International Public Sector Accounting Standards (IPSASs) in all jurisdictions and the provision by the G20 of sufficient resources to develop and disseminate implementation guidance for the global standards they support. IFAC also proposed:
Strengthening of the International Monetary Fund's Code of Good Practices on Fiscal Transparency through the application of IPSASs;
Support for the establishment of well-governed professional accountancy bodies in countries where they do not currently exist;
Continued support for the World Bank's Reports on Observance of Standards and Codes (ROSC) initiative;
The establishment of an international, principles-based threshold of competencies for senior financial officers in public interest entities; and
That the G20 ensure its actions are supportive of the small business sector.
IFAC is developing a further set of recommendations that builds on the proposals in the G20 Communiqué.
About IFAC IFAC (www.ifac.org) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 157 members and associates in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. Through its independent standard-setting boards, IFAC sets international ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high-quality performance by professional accountants in business.
Introduction Good morning. I'd like to thank Dr. Kalbers and the Center for Accounting Ethics, Governance & the Public Interest for inviting me here today. I would also like to thank all of you for taking time from your busy schedules to hear what I have to say about restoring integrity to the global financial system, which, I'm sure you will agree, is in dire straits.
Before we get started, I would like to extend a particular welcome to the students in the audience. While it's true that you're inheriting a world that is in the worst financial shape that it has been in many decades, it's a great time to be entering the accountancy profession.
The importance of accounting and auditing is being reinforced as it never could be in times of plenty. For example, who in the accounting world ever would have thought that we would be asked to explain "fair value" to our non-accounting friends and even strangers who have a sudden interest in a financial reporting concept-let alone that they would be interested in our responses? This is, indeed, a rare time for the accountancy profession.
You will be entering a truly global profession in terms of rapid convergence to a single set of auditing and financial reporting standards.
You will be on the ground floor of new systems for regulating the profession and the global financial markets.
And, you may be participating in a debate about the purpose of financial reporting: Is it for regulators and marketplace stability, or for investors and credit grantors?
Now, I'd like to focus specifically on the economic crisis.
